Ventas, Inc. (NYSE:VTR) has started negotiations with a view to acquiring Brookdale Senior Living, Inc. (NYSE:BKD). This follows the dropping of an acquisition bid by Blackstone Group LP (NYSE:BX). Ventas is seeking to purchase a part of Brookdale Living or all of it.
Interest in one of the biggest senior-living facilities in the United States by Blackstone Group was first reported in January. While presenting the latest earnings report, the executive chairman of Brookdale Senior Living, Dan Decker, confirmed the developments.
“I can report that our board and management team working together with our legal and financial advisers are in a process of exploring options and alternatives to create and enhance shareholder value,” said Decker in an earnings call with investors and analysts.
Complicating the talks is the fact that the real estate that is in Brookdale’s name is also claimed by other entities such as Ventas who may require to be consulted before the deal can go through. At present, approximately 5 percent of Ventas’ revenues comes from property leases and management contracts it has with Brookdale senior living.
Though it is not clear whether there is another suitor besides Ventas that is interested in Brookdale Senior Living, it is also understood that Blackstone may renew interest. It is also possible for old-age facility to end up without a deal on the table despite the fact that it has been under pressure from hedge funds that are activist in nature who have been pushing for a deal to reverse a decline in share prices.
Healthcare real estate
The Chicago, Illinois-based Ventas is one of the largest investment trusts focused on the real estate of healthcare facilities. The top Nasdaq stock has a market capitalization of more than $20 billion and has properties in the United Kingdom, Canada, and the United States.
Ventas has recently been on an acquisition spree. In 2016, it bought from Blackstone properties worth about $1.5 billion. A year earlier, the real estate investment trust had forked out about $1.75 billion to acquire Ardent Medical Services, an operator of hospitals.
On Friday shares of Ventas Inc fell by 0.66 percent. One of the top Nasdaq stocks closed the day at $62.16.